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Trump 'committed' to U.S. renewable fuels: Iowa governor

U.S. President Donald Trump speaks to the Heritage Foundation’s President’s Club Meeting in Washington, U.S., October 17, 2017. REUTERS/Joshua Roberts

(This story corrects ninth paragraph to say that refiners want exported ethanol to qualify for renewable credits, not exported fuel blended with ethanol.)

By David Shepardson and Jarrett Renshaw

WASHINGTON (Reuters) - U.S. President Donald Trump sought to ease concerns on Wednesday that his administration would make major alterations to biofuels policy, telling Iowa's governor he was committed to a decade-old biofuels program even as a top official considers changing it.

U.S. law requires fuel companies to add biofuels like ethanol to the country's fuel supply through the 'renewable fuel standard,' adopted in 2005. The Trump administration is considering lowering the mandatory level, a worry for corn-growing states like Iowa.

Iowa Governor Kim Reynolds said she held separate calls with Trump and U.S. Environmental Protection Agency (EPA) Administrator Scott Pruitt on Wednesday, in which she urged them not to make that change.

"Both of them personally committed to me their continued commitment to the renewable fuel standard," Reynolds said, adding that the call with Trump was "positive."

However, White House spokeswoman Sarah Sanders said the administration "didn't make any assurances" on renewable fuel standard (RFS) levels.

"No definitive decision was made on RFS," she said.

The biofuels industry has been ratcheting up pressure in Washington in response to actions from the EPA it sees as threatening the program, which was designed to reduce carbon emissions.

Independent oil refiners, meanwhile, have pushed the Trump administration to soften requirements for ethanol use, which costs them hundreds of millions of dollars annually.

Some refiners want another change that would ease their cost burden: they want exported ethanol to qualify for credits under the renewable fuel program.

The chief executives at four such companies - Valero, PBF Energy, Monroe Energy and HollyFrontier - delivered a letter to the White House on Wednesday urging the change.

Two industry sources told Reuters they had received assurances from White House officials that Trump was directing the EPA to allow credits on exports, but to end its efforts to reduce renewable fuel requirements overall.

PRESSURE FROM MIDWEST

Last month, the EPA said it was looking to cut 2018 biodiesel blending requirements, roiling markets and drawing criticism from the country's farm belt. In July, it proposed cutting total volumes of all renewable fuels use for next year.

Elected officials from the corn-growing Midwest have said they will not be satisfied with White House reassurances until the EPA publicly agrees not to reduce renewable fuel standards. Several senators met with Pruitt on Tuesday to discuss the issue.

In a statement after the meeting, Iowa Republican Senator Joni Ernst said she had expressed "significant concerns" over the agency's recent moves to potentially set biodiesel requirements for 2018 and 2019 at "substantially lower volumes."

Senator Charles Grassley, an Iowa Republican, said he told Pruitt during the hour-long meeting "that supporting biofuels isn't just good policy. It's also what President Trump promised."

Reynolds, meanwhile, urged Iowans to contact lawmakers and administration officials and said she is meeting next week with U.S. Vice President Mike Pence and Pruitt in Washington.

A group of 33 senators wrote to Trump this week urging the EPA to maintain levels for 2018 and increase its proposed 2019 biodiesel requirements.

Pruitt would not want "to take any steps to undermine the objectives in the statute of the RFS," said EPA spokeswoman Liz Bowman.

Late on Tuesday, the Senate Committee on Environment and Public Works postponed a planned hearing for Wednesday to consider the nominations of four EPA officials. Senator Tammy Duckworth, an Illinois Democrat, said she was placing a hold on two EPA nominees over the ethanol issue.

Ernst said on Wednesday she was declining to support one of the nominees over concerns about the EPA's plans for renewable fuels.

(Reporting by David Shepardson in Washington, Emily Flitter in New York and Jarrett Renshaw in Philadelphia; Editing by Rosalba O'Brien)